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RIYADH: Saudi Arabia's largest real estate company, Dar Al-Arkan, said its fourth-quarter net profit halved from the same time the year before as finance costs rose and property sales generated lower margins.
Net income for the three months ending Dec. 31 was SR 144 million versus SR 290 million in the prior-year period. Gross profit in the quarter fell by 10.2 percent, the company said in a bourse statement.
Dar said its lower gross margins on property sales were "attributable to the geographical location of the properties". In the past, much of its profit has come from selling land in Saudi Arabia and it has said it is working on a plan to diversify revenue sources in order to stabilize its income. It also cited higher operating expenses and finance charges and lower non-operative income for the fall in profit.
The company said in November it had outstanding debt of around SR 4.4 billion, with sukuk of SR 750 million and SR 1.69 billion maturing in May 2014 and February 2015 respectively. It also has short-term murabaha Islamic loans with local and international banks, which it plans to roll over. Net profit for 2012 was SR 989 million, a fall of 9.1 percent from 2011.